The latest attempt to forge a consensus on how to reform the grain handling and transportation system has ended in failure.
Farm organizations, railways, grain companies, the Canadian Wheat Board and governments have spent much of the last three months closeted together to figure out how to implement the Estey report.
But the man who was appointed by Ottawa to lead those consultations conceded last week that the talks, which ended Sept. 10, failed to produce a common front.
“We’ll have to report disagreement on all of the major issues,” said Arthur Kroeger.
Read Also
Agriculture ministers commit to enhancing competitiveness
Canadian ag ministers said they want to ensure farmers, ranchers and processors are competitive through ongoing regulatory reform and business risk management programs that work.
Those major issues include: the role of the wheat board in grain transportation; a revenue cap on the railways, including the questions of how future productivity gains should be shared with shippers and farmers; and how to encourage more competition among the railways through such things as joint running rights.
Kroeger said that by failing to agree, the industry stakeholders have essentially turned the issue over to the federal government.
“I cautioned them that if they couldn’t resolve their differences and wanted to go with a report of divided views, they were in effect handing the decision over to the government,” he said Sept. 13. “That’s what they concluded they wanted to do.”
Kroeger said he will submit a report on the outcome of the talks to the government by Sept. 30, along with a letter in which he will recommend what to do.
But in the interview he dropped no hints as to what he might say.
It was no secret going into the talks that it would take a Herculean effort for farmers, the wheat board, railways and grain companies to set aside years of disagreement and distrust and find common ground.
To do so would have required all sides to move away from well-entrenched positions and compromise on some highly contentious issues.
“The question was would people move off their positions or not and they didn’t,” said Kroeger, adding he wouldn’t blame any single player for the impasse.
On the question of the revenue cap, the report will outline three options. While Kroeger wouldn’t reveal the details of those proposals, he said there was no agreement on the base level for calculating what railway revenues should be in the future, and disagreement on sharing productivity gains. One option would use a formula to ensure that gains are shared with producers, while another would rely on railway competition to pass savings back through the system.
On the issue of competition, perhaps the most divisive issue was joint running rights, under which competing rail companies would be granted access to each other’s track. Kroeger said many producer representatives felt joint running rights would increase rail competition, but the railways refused to consider the idea, saying the uncertainty created would make it difficult for them to raise money on capital markets for future investment.
On the role of the CWB, two options will be put forward to Ottawa. Under one, the board would continue to have a significant role in planning and co-ordination of rail movement.
The other would create a more commercial system in which railways and grain companies would handle the logistics of moving grain to port.
